On Monday, Mizuho (NYSE:MFG) Securities adjusted its outlook on UGI Corporation (NYSE:NYSE:UGI), increasing the price target to $33.00 from the previous $30.00 while maintaining an Outperform rating on the stock. The adjustment follows a period of notable performance for UGI's shares, which saw a significant rally, particularly after the fourth fiscal quarter of 2024 earnings call. The call featured encouraging remarks from UGI's new CEO, Bob Flexon, regarding the company's AmeriGas division and its overall valuation.
The positive momentum for UGI was further supported by interactions between Mizuho analysts and UGI management during the recent PEI Conference, as well as a direct meeting with CEO Bob Flexon. Analysts at Mizuho believe that the post-earnings surge has started to bridge the gap between UGI's sum-of-the-parts (SOTP) valuation and its market price, but they anticipate that there is still potential for additional growth.
AmeriGas is highlighted as a key element in realizing the full value of UGI's SOTP valuation. Despite current expectations attributing minimal equity value to AmeriGas, Mizuho sees the stabilization of operations or potential asset sales within UGI's portfolio as possible triggers for further appreciation. The firm suggests that a strategic shift towards emphasizing UGI's Midstream and Utilities segments could cultivate long-term value.
In light of these assessments and the initiation of fiscal year 2027 estimates, Mizuho has decided to raise the price target for UGI Corporation. The new target reflects an optimistic stance on the company's future performance and valuation adjustments. The positive rating and revised price target suggest Mizuho's confidence in UGI's strategic direction and potential for continued growth.
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